Peru | Inflation continues to decline, surprising the market consensus downwards

Summary

Inflation was 0.02% m/m in September. The increase in fuel prices stood out during the month. On the contrary, food prices fell.

Key points

• Key points:
• The interannual rate was reduced from 5.6% in August to 5.0% in September, favored by a high interannual comparison base (inflation in September 2022 was 0.52% m/m).
• Core inflation, in year-on-year terms, this inflation indicator fell to 3.6% (August: 3.8%).
• At BBVA Research we maintain the forecast that total inflation will continue to decrease in the coming months. The high year-on-year comparison base, the weakness of domestic demand, and the restrictive monetary position point in this direction.
• However, the increase that has been observed in the price of oil, the depreciation pressures on the local currency, and the impacts that weather anomalies continue to have on food prices will limit the speed of this decline. In our base scenario we maintain that inflation will end the year at around 4%.

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